This blog by a tax professor is about tax reform and moving tax systems into the 21st century. It focuses on tax system weaknesses, critiques selected reform proposals, and offers new ideas, with an emphasis on federal, California and multistate matters. Additional information - articles, reports and links, can be found at the 21st Century Taxation website (see link below right). I welcome your comments.

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Sunday, November 3, 2013

Clearing a path to a lower corporate tax rate

What will comprehensive tax reform look like?

We hear a lot of talk from elected officials of both parties about the need to lower the corporate tax rate. There is also talk that it be done in a revenue neutral manner. That might mean different things to both parties. It might mean that there would be some revenue boost from lower rates (Republicans) versus more of a number crunching exercise (Democrats).

In 2011, the Joint Committee on Taxation estimated that it would cost $717 billion over ten years to lower the corporate rate to 28%. Much of the revenue to make this revenue neutral comes from timing changes, such as slower depreciation. I think there will need to be an increase in the capital gains rate and cut back on some generous individual tax preferences (such as the exclusion for employer-provided health coverage and the home mortgage deduction) to help lower both teh corporate and individual rates.

I've got a short article in the 10/31 AICPA Corporate Taxation Insider on this topic - here. I hope you'll take a look.

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AICPA Tax Reform Videos

Welcome!

The world is changing yet tax systems have been slow to change in the same direction. This can hinder economic progress, lead to a loss in tax revenue, and frustrate taxpayers. Here, I explain some of the problems at the federal, multistate and California levels, offer ideas for reform, and an opportunity to comment on what I post. These views are my own and not necessarily those of my employer or any organization I'm connected with. Thanks for reading and posting comments (this page gets over 8,000 visits per month)! For more on tax reform, please visit http://www.21stcenturytaxation.com. You can reach me at annette.nellen@sjsu.edu.

Annette Nellen

Professor Annette Nellen

About Me

I am a tax professor and Director of the MS Taxation Program at San Jose State University. I teach courses on tax research, tax accounting methods, taxation of property transactions, state taxation, ethics, and tax policy. I am active in the tax sections of the AICPA, ABA and CA Bar. I currently serve on the AICPA Tax Executive Committee (chair) and Tax Reform Task Force. I am a past chair of the AICPA Individual Taxation Technical Resource Panel and a past vice chair of the Executive Committee of the California Bar Tax Section. At SJSU I chair the Athletics Board and serve on the WASC accreditation steering committee. I welcome your comments to my blog posts.